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In 1991 Billy and Akaisha Kaderli retired at the age of 38. Now, into their 4th decade of this financially independent lifestyle, they invite you to take advantage of their wisdom and experience.

How to Start a Real Estate Business

Build Your Own Property Empire

Eddie Segal

The world of real estate investing is certainly an exciting one, and it’s easy to see why it attracts so many newcomers each year. However, it can be a tough nut to crack as you’ll need to dedicate time to hunting down the best properties, orchestrating extensive marketing campaigns, and juggle a huge range of diverse clients.

Luckily, we’re on hand to help. We’ll walk you through the benefits of launching your own real estate business and how to make a success of it at each step of your journey.

Is A Real Estate Business Profitable?

The short answer? Most definitely. However, it requires hard work and dedication as it’s estimated around three out of every four new real estate businesses fail within the first five years. For those that stick with it, though, the rewards can be impressive.

The potential market is huge. According to the National Association of Realtors, in 2020, there were 5.64 million sales of existing homes and 822,000 sales of new homes across the US. Much of your profit will come from acquiring property and realizing gains over time through appreciation.

To help shoulder the burden of the initial investment, and look after your savings, you’ll probably want to launch your first venture with a real estate business loan.

Top Benefits of Starting a Real Estate Business

Be your own boss - One of the main reasons people get into real estate investing is the chance to be their own boss. Success or failure is entirely on your shoulders, but you get to make all the decisions yourself and set your own agenda with total flexibility

Low barriers to entry - You don’t need a university degree to get started in real estate investing and anyone can give it a try. That’s not to say it won’t be hard work, and the competition isn’t fierce, but learning the ropes is straightforward as long as you dedicate the time and effort

Financial security - Holding on to multiple appreciating properties means your financial future is secured. You can either realize profits over time as the value rises, by renovating properties, or through a steady income stream from renters. Each offers a stable form of income and, as long as you’ve done your research and purchased in the right areas, you can secure a nice nest egg for retirement

Hedge against inflation - Each year the purchasing power of the dollar decreases due to inflation. As most people’s wages remain fairly static, a real estate business represents a golden opportunity to hedge against inflation with many property values rising at a higher rate.

Steps to Starting a Real Estate Business

Step One - Set Your Objective

Before you get too excited and start putting offers in on properties, ask yourself what your goals are. Do you want multiple properties to build a rental income, and are you equipped to handle tenant management? Or do you have the skills and contacts to build a renovation business?

Setting a clear goal right at the outset of your business will determine how successful you’ll be and give you some solid benchmarks to work against. Make sure you plan for the long term and set key performance indicators for the next five, ten, and 15 years.

Get everything written down in a detailed business plan. This will not only help give you direction, but it’ll also be a key document when securing financing.

Step Two - Do Extensive Research

Now that you have a clear goal, you need to see if it’s viable in your area. Research your local market extensively. What sort of properties are selling and where? For example, is the downtown area crying out for rental properties, or is the market saturated?

Check out the competition too. Find out how profitable sales are in different regions and areas and what sort of business models work well. You might find that you need to go back to the drawing board to reset your objectives, or even need to expand your business further afield.

Thorough research will ensure you’re not fumbling around buying any old property and is key in ensuring your business is profitable. Plus, it helps identify your strengths and weaknesses early on, letting you know where you need to improve. Organizing this information into a SWOT analysis PowerPoint presentation can provide clarity and structure to your findings.

Step Three - Form a Real Estate LLC

Before you start buying and selling we’d highly recommend establishing your business as a real estate LLC. An LLC is a limited liability company and is the best way to protect yourself from the risks associated with property investing.

It means you’ll be conducting all sales and purchases under the name of your business and you yourself won’t be personally liable for any losses, keeping your own finances safe. You can even set up an LLC for each property you own to spread the risk even further.

However, bear in mind there are cost implications and various regulations to consider when setting up an LLC and this will vary across each state.

Step Four - Set up Your Website and Define Your Brand

The overwhelming majority of property searches, inquiries, and purchases originate online, so you’re going to need a professional website before you start. In fact, there are a number of DIY web-builders on the market now that have ready-to-go real estate business templates. They’re easy to use and you could have a decent website set up within a few hours.

Alternatively, you might want to engage the services of a professional web developer to really tailor your look. Either way, this is the perfect time to define your brand and establish yourself as the go-to expert in your chosen real estate niche.

Choosing a memorable and relevant domain name is crucial for your online retail business, as it serves as the digital identity that customers will associate with your brand.

Step Five - Arrange Funding

By this stage, you’ve done your research, lined up some potential properties, set yourself up as a legal business, and have a website up and running. Now it’s time to arrange funding and start making some purchases.

There are hundreds of options available for commercial real estate loans these days and a lot of flexible ways to secure funding. Typically, lenders will be willing to offer up to 80% of the value of any property you purchase and interest rates are usually quite reasonable.

If you have a good credit score, strong personal financial history, and no existing debt, it’s more than likely you’ll be offered lower rates. You could try traditional banks, alternative online lenders, and even federal funding to secure your first investments.

Step Six - Launch a Marketing Campaign

Getting your brand out there is going to be critical to your success. You should focus your efforts on finding clients in your local area and apply local SEO to ensure you rank high in Google searches. 

You might want to consider setting some of your budget aside to secure Google or Facebook ads too. These can be incredibly effective at bringing in customers, especially in the early days of a real estate business.

Never underestimate local networking, either. Get to as many events as you can as personal relationships and referrals could be the backbone to your success. You might want to start with your local chamber of commerce or see what kind of business events are on in your area.

Stay active on social media, get involved in conversations on LinkedIn and post high-quality, enticing images of your properties on Instagram to build engagement.

Step Seven - Keep up to Date on Your Leads

One constant you’ll find in any business is that you’ll be chasing up leads and sales. This is even more true in the world of real estate and you’re going to be spending a lot of time emailing and calling potential clients.

You’ll need to keep a detailed database of current and potential clients, track when you last contacted them, gauge their interest, and ensure you’re offering something of value that’s specific to them. Plus, you’ll need to juggle all of this whilst trying to generate brand new leads at the same time.

Step Eight - Regularly Check Your Progress

Make sure to keep an eye on how you’re tracking the goals in your business plan. Monthly pit stops are a great way to measure your success and spot any issues before they become major risks.

It helps you see what you’re doing right, and where you might be going wrong. Think of your business plan as a living document that needs to adapt and change as you encounter new circumstances.

Conclusion

Launching a new real estate business can be one of the most profitable and rewarding things you can do. As you can see, though, you’re going to need to put the effort in to make a success of it. You need to do a lot of research, put in a huge amount of groundwork, and be prepared to deal with the changes that can come in a fast-paced industry. 

That being said, it shouldn’t take long for determined entrepreneurs to pick up the basics, learn from their mistakes, and apply their learning to a highly successful venture. 

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About the Authors

 
Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance, medical tourism and world travel. With the wealth of information they share on their award winning website RetireEarlyLifestyle.com, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurer’s Guide to Early Retirement and Your Retirement Dream IS Possible available on their website bookstore or on Amazon.com.

contact Billy and Akaisha at theguide@retireearlylifestyle.com

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